Problems 'not new'

In June, the Co-op announced it had reached an agreement with the bank regulator, the Prudential Regulation Authority, to plug a £1.5bn capital hole in its balance sheet.

It includes a stock market listing, measures to raise money from bondholders and the sale of its insurance business, planned for 2014.

"The underlying issues in the results today are not new," said Co-op Bank's chief executive, Niall Booker.

"We are now clearly focused on improving the capital position of the Bank... [and] at the same time, we have continued to lend, maintaining our focus on supporting our loyal customers, both in retail and through our continued focus on lending to small and medium-sized businesses."

The capital shortfall came to light during Co-op Bank's attempts to buy more than 600 bank branches from the partially state-owned Lloyds Banking Group.

A deal was initially agreed in 2012, but fell through earlier this year. MPs are currently holding an inquiry into the circumstances of the collapsed deal.

Lloyds executives have already claimed they knew about the hole in Co-op's balance sheet months earlier.